Tuesday 8 July 2014

SOP soon for Ford gearbox plant in China

Start of production (SOP) is expected this year in Ford’s first transmission plant in Chongqing, China, set to initially have the capacity to produce 400,000 units a year.

Last year, Ford China announced it had sold 935,813 ‘wholesale vehicles’ in the region in 2013 compared with 626,616 in 2012, an increase of 49 per cent.

Ford Motor (China) Ltd was set up in 1995 in Shanghai. Total employment by the company in February of this year amounted to a staff of 2,500 of which 900 are in Shanghai, 1,300 in Nanjing and 300 at FAFC – Ford Automotive Finance (China) Ltd.

At present, Ford has two joint ventures and two wholly-owned operations in China.

On the passenger car side, Ford formed a joint venture (JV) with Changan in 2001 in a business that over a decade later was relaunched as Changan Ford Automobile Co. Ltd (CAF). Ford and Changan are equal partners.

Ford also has a 32 per cent stake in Jiangling Motors Corporation (JMC), also set up in 1995.

Finally, in addition to its FAFC unit based in Shanghai, there is Ford Motor Research & Engineering (Nanjing) Co. Ltd. which is another operation wholly-owned by Ford Motor Company.

At present, Ford has two assembly plants (one opened in 2003 and another in 2012) and two engine plants. Production at the Changan Ford Automobile Ltd. joint venture started on January 18, 2003 at the first Changan Ford Assembly Plant. The first product produced was a Ford Fiesta.  This was the first domestically-built Ford car offered in China. 

The latest engine plant to come on stream is Changang Ford Automobile Engine Plant (CFAEP) in Chongqing. It started production in June 2013 from an investment of over US$500 million and with a planned production capacity of 400,000 a year.

At a ribbon-cutting ceremony, Ford president and chief executive officer Alan Mulally said then, “This new engine plant is world class,”

According to Ford, the plant initially manufactures both 1.5-litre naturally-aspirated four-cylinder and 1.0-litre three-cylinder EcoBoost gasoline engines.

“The engines produced here and the processes by which they are manufactured represent the latest in sustainable and green manufacturing processes,” Mulally claimed. “The 1.5-litre and 1-litre engines produced will help power Ford’s continued growth here in the world’s largest automotive market.”

The engines are used in the Ford EcoSport and Fiesta models, according to the automaker. Ford is hoping the new facility will help support its plans to roll out 15 new vehicles in China by 2015.

There is an older engine plant – ground-breaking began in 2005. This is Changan Ford Mazda Engine Co. Ltd (CFME). It represents an investment of over US$300 million and offers a capacity of at least 350,000 engines a year. Ford and Mazda each have a 25 per cent stake with Chongqing Changan Automobile Co. Ltd. taking the remaining 50 per cent.

                                  Three new plants

However, also on the stocks are two assembly plants and a transmission plant, all now under construction.

Changan Ford Engine Automobile Co. Ltd. Assembly Plant 3 in Chongqing is due to have a start production late this year. Ground-breaking took place in August 2012. With an investment of US$600 million this plant has a planned capacity of 300,000 units a year.

Changan Ford Engine Automobile Co. Ltd. Assembly Plant 4 in Hangzhou has an SOP date set for 2015 and following an investment of US$760 million aims to meet its initial planned capacity of 250,000 units annually.

As with the Chongqing assembly plant facility Ford has a 50 per cent stake in this last business of which ground-breaking took place at the same time – August 2012.

The new transmission plant, set for SOP this year is the Changan Ford Engine Automobile Co. Ltd Transmission Plant. Ford likewise has a 50 per cent stake in this unit in Chongqing which is costing at least US$350 million and is set to have a capacity of 400,000 units a year.

Ford also has a JV truck engine plant under construction – JMC Engine Plant – with an SOP yet to be announced although with ground-breaking taking place in June 2013 this might be expected to happen in 2015; and it has the new JMC Taiyuan Heavy Truck Plant. 

Ford has only a 32 per cent stake in the JV truck unit which is expected to turn out a modest 10,000 units a year compared with 200,000 units-a-year capacity from the commercial vehicle engine plant in which it also has a modest 32 per cent stake. Such high production numbers might suggest Ford will be exporting some engines from China.

The SOP date for the heavy truck plant in which the investment is only US$82 million, also has yet to be released.

Meanwhile, in the first half of this year, Ford China sold 549,256 wholesale vehicles, a rise of 35 per cent, of which CAF accounted for 397,958, a rise of 23 per cent, and JMC 132,938, a rise of 21 per cent. These figures suggest Ford China will sell wholesale over one million vehicles in 2013 in the region.

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